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  • Jan 1st, 2005
  • Comments Off on Chinese shares close near five-year low
China's shares ended the year near a five-year low on Friday amid weak investor sentiment and fears the slump will continue into 2005, but blue chips bucked the trend on hopes they will post strong 2004 earnings. The Shanghai composite index finished down 0.6 percent at 1,266.496 points, near 1,259.432, the lowest level in half a decade set on September 14. The index has lost 15 percent this year to become Asia's worst performer, pummelled by Beijing's economic-cooling steps and corporate scandals. Shanghai Automotive Co Ltd, which owns one fifth of General Motors Corp's flagship car plant in the city, dropped 3.5 percent to close at 4.75 yuan, on concerns over weakness in China's slowing car sector, analysts said.

TV maker Sichuan Shanghaiing Electric Appliance Co Ltd dropped 3.5 percent to 3.54 yuan, it's lowest since mid-1996.

It has shed nearly 30 percent of its value after having warned of a big loss for 2004 from $467.5 million of potential bad debt owed by Apex, which distributes DVD players, televisions and other electronics to US stores such as Wal-Mart.

"This week's continuous decline has dimmed hopes that the index could reach this year's peak of 1,700 points in 2005," said Lou Wei, an analyst at East Asia Securities.

Blue chips bucked the trend, as institutions were bullish about their strong profitability, analysts said. Yangtze Power, which oversees the giant Three Gorges Dam hydroelectric project, rose 0.8 percent to 8.79 yuan.

Copyright Reuters, 2005


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